BlockFi's Recovery Plan: What's Next for Crypto Investors?

BlockFi has emerged from bankruptcy as of October 24, 2023. The company's management, advisors, and stakeholders have worked over the past 11 months to reach this milestone, doing so with commendable speed and efficiency compared to many other retail crypto companies.

Legal Initiatives to Recover Assets: BlockFi's Strategy

With its official emergence from bankruptcy, BlockFi can now commence the execution of its detailed recovery plan. The plan outlines several crucial actions, including:

• Recoveries: BlockFi is set to initiate legal proceedings to recover assets believed to be owed by FTX, 3AC, and other entities and their associated bankruptcy estates. Success in these legal battles could potentially enhance client recoveries.
• Withdrawals: The company will continue to distribute digital assets back to its clients, including those who hold BlockFi Interest Accounts (BIA).
• Claims: The claims reconciliation process will persist to ensure that client claims are accurately reflected in terms of asset class and amount. This aims to ensure fair and equitable distribution of remaining and recovered assets.

Navigating the BlockFi Recovery Plan: Key Information for Clients

Wallet Customers: Withdrawals are currently available to nearly all Wallet customers. Those eligible for withdrawals are encouraged to log in to BlockFi's website and submit a withdrawal request. Additional information can be found in the Wallet Withdrawal FAQs on the BlockFi website.

BIA and Loan Customers: With BlockFi's emergence from bankruptcy, the company is gearing up for the wind-down process, as outlined in the recovery plan. The Plan Administrator and remaining employees are working to prepare BlockFi for the initial distribution of available assets from the wind-down estate.

While the company is aiming to begin the initial distribution of the digital assets in early 2024, subsequent allocations will hinge on multiple factors, including potential recoveries from FTX and its affiliates.

BlockFi is pleased to announce that its bankruptcy plan (the “Plan”) is effective and the company has emerged from bankruptcy as of October 24, 2023 (the “Effective Date”).

Factors Influencing Subsequent Distribution: A Closer Look

For clients holding funds in BlockFi Interest Accounts (BIA) and Retail Loans, BlockFi will be sending emails to guide them through the process of withdrawing their funds based on the recovery amounts approved by the Plan. The company anticipates this will be the first wave of distribution, to be followed by additional ones. The timing and amount of subsequent distribution will depend on several factors, primarily BlockFi's treatment in the FTX bankruptcy cases.

For clients holding funds in BlockFi Wallet, the company is actively working on distributing funds to those with assets in the BlockFi Wallet product. Eligible clients are encouraged to submit a withdrawal request to receive their funds in cryptocurrency as soon as possible. The Wallet withdrawal window is set to close on December 31, 2023.